Exhibit 10.5
Transaction No. 1188-L01-01
MASTER LEASE AGREEMENT
(PALM BEACH PRINCESS VESSEL)
THIS MASTER LEASE AGREEMENT ("Lease" or "Agreement") is made and entered
into as of July 6, 2004, by and between CRUISE HOLDINGS I, LLC, a Nevada limited
liability company, its successors, designated subsidiaries and assigns
("Lessor") and PALM BEACH MARITIME CORPORATION, formerly named MJQ CORPORATION,
a Delaware corporation ("MJQ"), and PALM BEACH EMPRESS, INC., a Delaware
corporation ("PBE"), jointly and severally (MJQ and PBE are hereinafter
collectively referred to as, the "Lessee").
RECITALS
WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease
from Lessor in accordance with the terms and conditions contained herein,
certain equipment more fully described in the Lease Schedule or Schedules,
referred to herein as a "Lease Schedule" or "Lease Schedules", as may from time
to time be executed by Lessee.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and conditions set
forth below and other good and valuable consideration, the receipt and
sufficiency of which all parties acknowledge, it is agreed as follows:
AGREEMENT
1. Recitals Incorporation. The recitals set forth above are hereby
incorporated into this Agreement as material parts thereof and not simply as
mere recitals.
2. Parties.
2.1. The Lessor is CRUISE HOLDINGS I, a Nevada limited liability company,
whose address is 0000 XxXxxx Xxxxx, Xxx Xxxxx, XX 00000-0000.
2.2. The Lessee consists of : (a) PALM BEACH MARITIME CORPORATION, formerly
named MJQ CORPORATION, a Delaware corporation, whose address is Xxx Xxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000. MJQ's Tax ID Number is 00-0000000
and its Organizational ID Number is 2965747. MJQ's location for the purposes of
all Uniform Commercial Code filings is the State of Delaware; and
(b) PALM BEACH EMPRESS, INC., Delaware corporation, whose address
is Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000. PBE's Tax ID Number
is 00-0000000 and its Organizational ID Number is 37777915. PBE's location for
the purposes of all Uniform Commercial Code filings is the State of Delaware.
3. Lease and Charter. This Lease is based upon the Bareboat Charter and
Option to Purchase ("Charter") of even date herewith, incorporated herein by
reference, entered into between Lessor and Lessee, allowing Lessee free use of
that certain Vessel, defined below, and further establishes the general terms
and conditions by which Lessor shall lease the Vessel and other furniture,
fixtures and equipment described in the Lease Schedule (collectively, the
"Equipment") to Lessee. Each Lease Schedule shall be in the form provided by
Lessor and shall incorporate by reference the terms of this Lease. The Equipment
is to be used in connection with that business described as the Palm Beach
Casino Line located on the Maritime Vessel named the Palm Beach Princess (IMO
Number: 8402937, Registration Number: 14348-84-D (Panama), DNV Class Number:
02720) ("Vessel" or "Premises"), to be docked at Port of Palm Beach, Xxx Xxxx
00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000. Lessee acknowledges and agrees
that the Premises is an ocean going passenger vessel built, constructed and
licensed to carry passengers for hire under the laws and flag of Panama. In the
event of any conflict between the terms and provisions of this Lease and the
Charter, the terms and provisions of the Charter shall control.
4. Term, Rent and Payment, Fees and Charges.
4.1. Term. The term of this Lease shall commence on the date set forth in
each Lease Schedule (the "Commencement Date") and continue as specified in such
Lease Schedule ("Term").
4.2. Rent and Payment. Lessee's obligation to pay rent for the Equipment
shall commence on the Commencement Date and continue for the Term. The Basic
Rent, as set forth and defined in the Lease Schedules, shall be payable in such
amount and on such
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date as set forth in the Lease Schedule. Any amounts payable by Lessee, other
than Basic Rent, shall be deemed Additional Charges. Additional Charges shall be
due and payable in accordance with the terms of the Lease Schedule or if not set
forth therein, on the Basic Rent payment date following the date upon which the
aforesaid Additional Charges accrue, or the last day of the Term, whichever is
earlier. Lessee shall make all payments at the address of Lessor set forth above
or at such other address as Lessor may designate in writing. As used herein, the
term "Rent" shall mean all Basic Rent and Additional Charges as described in the
Lease Schedules.
4.3. Late Charge. If any Basic Rent, as defined in the Lease Schedule, is
not received by Lessor or its assignees within five (5) days of when due then a
late charge on such Rent shall be due and payable with such Rent in an amount
equal to one and one-half percent (1.5%) of the delinquent Basic Rent, as
defined in the Lease Schedule, payable for each month such Basic Rent remains
delinquent, as reimbursement for administrative costs and not as a penalty.
4.4. ACH. Lessee shall complete, execute and deliver to Lessor an
Authorization for Automatic Payment form, which authorizes Lessor to deduct
payments of Basic Rent directly from Lessee's checking or savings account at a
specified financial institution in accordance with this Lease, the Charter and
any Lease Schedules.
4.5. [Intentionally omitted.]
4.6. [Intentionally omitted.]
4.7. Documentation Costs, Other Expenses and Charges. In connection with
the closing of each transaction, Lessee also agrees to pay all of Lessor's
out-of-pocket expenses in connection with the closing of each transaction,
including without limitation: [i] documentation costs for this Lease and each
Lease Schedule; [ii] any fees and costs of legal counsel utilized by Lessor
(including in-house counsel); [iii] the costs of site and vessel inspections;
and [iv] all other out-of-pocket expenses incurred by or on behalf of Lessor. At
such time as the Lease closes, the aforementioned out-of-pocket expenses shall
not exceed $25,000.00.
4.8. Imposts. In addition to the monthly Basic Rent due in each Lease
Schedule, Lessee agrees to pay and indemnify Lessor for, and hold Lessor
harmless from and against all taxes, assessments, fees and charges (hereinafter
called "Imposts") together with any penalties, fines or interest thereon levied
and imposed by any governmental agency or unit (state, local, federal, domestic
or foreign), regardless of party assessed against: (i) with respect to the
Lease, the Charter or any Lease Schedule; (ii) upon the Equipment, its value or
any interest of Lessor and/or Lessee therein; (iii) upon or on account of any
sale, rental, purchase, ownership, possession, use, operation, maintenance,
delivery or return of the Equipment, or value added thereto, other than taxes
imposed on or measured by the net income or capital of Lessor. The amount of the
Impost shall become Supplemental Rent to be paid by Lessee within ten (10) days
after Lessor's demand. If any Impost relates to a period during the Term of a
Lease Schedule such Impost shall continue, notwithstanding the expiration or
termination of the Lease or the Lease Schedule, until all such Imposts are paid
in full by Lessee.
4.9. Lessor's Performance of Lessee's Obligations. If Lessee fails to
comply with any of its covenants or obligations herein, Lessor may, at its
option, perform such covenants or obligations on Lessee's behalf without thereby
waiving such conditions or obligations or the failure to comply therewith and
all sums advanced by Lessor in connection therewith shall be repayable by Lessee
as Additional Charges. No such performance shall be deemed to relieve Lessee of
its obligations herein.
5. Certificate of Delivery and Acceptance. Lessee shall deliver to Lessor a
Certificate of Delivery and Acceptance ("Certificate of Acceptance") in the form
attached to the Charter.
6. Net Lease. This Lease including each Lease Schedule is a net lease and
Lessee's obligation to pay all Rent due and the rights of Lessor or its
assignees in, and to, such Rent shall be absolute and unconditional under all
circumstances, notwithstanding: [i] any setoff, abatement, reduction,
counterclaim, recoupment, defense, except the defense of prior payment to the
Lessor in accordance with Lessor's instructions, or other right which Lessee may
have against Lessor, its assignees, the manufacturer or seller of any of the
Equipment, or any other person for any reason whatsoever, including, without
limitation, any breach by Lessor of this Lease; [ii] any defect in title (other
than defects and exceptions caused by Lessor), condition, operation, fitness for
use, or any damage to or destruction of and of the Equipment, except to the
extent resulting from the gross negligence or willful misconduct of Lessor or
any of its employees, agents or representatives; [iii] any interruption or
cessation of use or possession of the Equipment for any reason, except to the
extent resulting from the gross negligence or willful misconduct of Lessor or
any of its employees, agents or representatives; or [iv] any insolvency,
bankruptcy, reorganization or similar proceedings instituted by or against
Lessee.
7. Grant of Security Interest.
7.1. In order to secure prompt payment of the Rent and all of the other
amounts from time to time outstanding under and with
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respect to this Lease and any Lease Schedule, and the performance and observance
by Lessee of all the agreements, covenants and provisions thereof, Lessee hereby
grants to Lessor a first priority security interest in the Equipment (including,
without limitation, all inventory, fixtures or other property comprising the
same) together with all software (embedded therein or otherwise), Intellectual
Property (as defined herein) and general intangibles necessary for operation of
the Equipment, all additions, attachments, accessions thereto whether or not
furnished by the supplier of the Equipment, all subleases, charters and
subcharters of the Equipment, and security deposits under any of the foregoing,
and any and all substitutions, replacements or exchanges for any such item of
Equipment, in each case in which Lessee shall from time to time acquire an
interest, and any and all insurance and/or other proceeds of the Equipment in
and which a security interest is granted hereunder.
7.2. Lessee hereby acknowledges and agrees that to the extent Lessor's
participation in any purchase and lease of an item or items of the Equipment
pursuant to this Lease, the Charter or any Lease Schedule constitutes a
financing of the purchase of such item or items of Equipment, Lessee's repayment
of the amounts of such financing shall apply on a "first-in-first-out" basis so
that the portions of the amounts of such financing used to purchase such item or
items of Equipment shall be deemed re-paid in the chronological order of the use
of such amounts to purchase the same.
8. Location, Use, Maintenance, and Inspection.
8.1. Location, Use, Maintenance and Repairs.
8.1.1. Lessee shall keep and use the Equipment in accordance with the
terms and conditions of the Charter.
8.1.2. Lessee shall at all times and, at its sole cost and expense,
properly use and maintain the Equipment in good operating condition, other than
the normal wear and tear, and make all necessary repairs, alterations and
replacements thereto (collectively, "Repairs"), all of which shall immediately
become the property of Lessor and subject to this Lease.
8.1.3. Lessee shall comply with manufacturer instructions relating to
the Equipment, and any applicable laws and governmental regulations.
8.1.4. Lessee shall pay all reasonable costs and expenses associated
with removal and return of the Equipment.
8.2. Identification and Inspection. Upon request by Lessor, Lessee shall
xxxx any Equipment conspicuously with appropriate labels or tags furnished by
Lessor and maintain such markings through the Term to clearly disclose that said
Equipment is being leased from Lessor. Subject to Lessee's reasonable security
requirements, Lessee shall permit Lessor's representatives to enter the Premises
to inspect any Equipment in accordance with the Charter.
9. Location, Property Rights, and Liens.
9.1. Personal Property. All of the Equipment is personal property and
Lessee shall not affix any of the Equipment to realty so as to change its nature
to a fixture or real property and agrees that all of the Equipment shall remain
personal property during the Term. Lessor expressly retains ownership and title
to the Equipment. Lessee hereby agrees that it shall notify Lessor of any change
in Florida gaming laws or regulations affecting Lessor as a result of its
ownership of the Equipment, and assist Lessor in complying with, at Lessee's
sole expense, all of Lessor's obligations as required by the state gaming laws
and regulations regarding maintenance, use, possession and operation of the
Equipment. Lessee hereby authorizes, empowers, and grants a limited power of
attorney to Lessor to record and/or execute and file, on Lessee's behalf, any
certificates, memorandums, statements, refiling, and continuations thereof as
Lessor deems reasonably necessary or advisable to preserve and protect its
interest hereunder. The parties intend to create a lease agreement and the
relationship of lessor and lessee between themselves. Nothing in this Lease
shall be construed or interpreted to create or imply the existence of a finance
lease or installment lease contract. Lessor makes no representation regarding
the treatment of this Lease, the Equipment or the payment of obligations under
this Lease for financial statement reporting or tax purposes.
9.2. Protection of Lessor's Property Rights. Lessor has the right to place
on any part of the Equipment, a medallion or other marker of suitable size
stating in substance [i] that the Equipment is the property of Lessor, and [ii]
that Lessor, to protect its rights, has filed or retains the right to file in
appropriate government offices a UCC Financing Statement covering the Equipment.
Lessee hereby authorizes Lessor to file any and all UCC-1 and/or UCC-3
statements and/or amendments thereto related to this Lease, any Lease Schedule,
and/or the Equipment without Lessee's authentication, to the extent permitted by
applicable law. If directed to do so by Lessor, Lessee will cooperate with
Lessor in preparing and filing such UCC statements and/or amendments thereto.
Lessee hereby agrees that by executing this Lease, the Charter or any Lease
Schedule that the same shall constitute Lessee's authorization for all UCC
statements and/or amendments thereto related to this Lease, any Lease Schedule
and/or the Equipment.
9.3. Accessions. Lessee agrees that if any part of the Equipment is
physically attached to other personal property that the
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Equipment shall not lose its identity and shall constitute an accession. Lessor
shall at all times herein retain its interests in the Equipment and such
interest shall continue to be perfected notwithstanding its becoming an
accession.
9.4. Liens and Encumbrances. Unless otherwise provided herein or in the
Charter, Lessee shall not directly or indirectly create, incur or suffer a
mortgage, claim, lien (other than unrecorded maritime liens), charge,
encumbrance or the legal process of a creditor of Lessee of any kind upon or
against this Lease or any Equipment. Lessee shall at all times protect and
defend, at its own cost and expense, the title of Lessor from and against such
mortgages, claims, liens (other than unrecorded maritime liens), charges,
encumbrances and legal processes of creditors of Lessee and shall keep all the
Equipment free and clear from all such mortgages, claims, liens (other than
unrecorded maritime liens), charges, encumbrances and legal processes. If any
such mortgage, claim, lien (other than unrecorded maritime liens), charge or
encumbrance is incurred, Lessee shall immediately notify Lessor and shall take
all actions required by Lessor to remove the same. Lessee shall indemnify Lessor
against and hold Lessor harmless from any and all costs, obligations,
liabilities, penalties, damages or other charges and any and all expenses
reasonably incurred in connection with investigating, defending or asserting any
claim, action, suit or proceeding incident to any matter indemnified against
hereunder incurred by Lessee in connection with or arising from any claims,
liens, charges, encumbrances and legal processes upon or against this Lease or
any Equipment.
10. Return of Equipment.
10.1. Duty of Return. At the expiration of any Term or upon termination of
the Lease, unless Lessee exercises or is deemed to have exercised its option to
purchase the Equipment from Lessor under this Lease, the Lease Schedule or the
Charter, Lessee at its expense shall return all of the Equipment to Lessor or
its designee in accordance with terms and provisions of the Charter and any
appropriate gaming laws and regulations and the terms and conditions of the
Lease Schedule.
10.2. [Intentionally omitted.]
11. Risk of Loss, Insurance.
11.1. Risk of Loss. Lessee shall bear the risk of all loss or damage to any
Equipment or caused by any Equipment during the Term of this Lease.
11.2. Equipment Replacement. Unless Lessee exercises its purchase option
under this Lease, the Lease Schedule or the Charter, and except as otherwise
provided in the Charter, if any part of the Equipment is lost, stolen,
destroyed, seized by governmental action or, in Lessee's opinion or Lessor's
opinion, damaged ("Event of Loss"), this Lease shall remain in full force and
effect without abatement of Rent and Lessee shall promptly replace such
Equipment at its sole expense with Equipment of equivalent value and utility,
and similar kind and in substantially the same condition as the replaced
Equipment immediately prior to the Event of Loss. Title to such replacement
Equipment immediately shall vest and remain in Lessor, and such Equipment shall
be deemed Equipment under this Lease and the applicable Lease Schedule. Lessor
shall cause to be paid to Lessee or the vendor of the replacement Equipment any
insurance proceeds actually received by Lessor as a result of the Event of Loss
promptly upon receipt of such proceeds. Lessee shall promptly notify Lessor of
any Event of Loss and shall provide Lessor with and shall enter into, execute
and deliver such documentation, as Lessor shall reasonably request with respect
to the replacement of any such Equipment. Notwithstanding the foregoing, if
there occurs an Event of Loss which constitutes, in Lessee's opinion, an actual
or constructive total loss of all or a substantial portion of the Equipment,
then Lessee shall have the option, exercisable upon written notice to Lessor, to
terminate this Lease and purchase the Equipment in accordance with Section 21.2;
provided, however, that if Lessee opts to purchase the Equipment under Section
21.2, then any insurance proceeds actually received by Lessor as a result of
such Event of Loss shall be used to offset the amount due from Lessee to Lessor
under Section 21.2 and the excess, if any, shall be promptly paid to Lessee.
11.3. Insurance.
11.3.1. Lessee shall obtain and maintain in full force and effect
insurance in accordance with the provisions of the Charter. SUCH INSURANCE MAY
NOT BE CANCELED OR MATERIALLY ALTERED WITHOUT THIRTY (30) DAYS PRIOR WRITTEN
NOTICE TO LESSOR.
11.3.2. All such insurance required herein shall be placed with
companies having a rating of at least A, Class XII or better by Best's rating
service. Lessee shall maintain the insurance throughout the contract period and
furnish to Lessor until the payment in full of any obligations herein, insurance
certificates of a kind satisfactory to Lessor showing the existence of the
insurance required hereunder and premium paid.
12. Lessor's Purchase and Performance. Upon receipt of a Lease Schedule
executed and delivered by Lessor, Lessee shall bear all responsibilities and
perform all material obligations of Lessor, which may arise as a result of any
document or agreement
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between Lessor and a vendor in connection with the Equipment to be leased under
said Lease Schedule, other than payment of the purchase price; provided that
Lessor has provided materially correct and complete copies of any and all such
documents and agreements to Lessee prior to the execution of such Lease
Schedule.
13. Taxes.
13.1. Taxes. Lessee agrees to report, file, pay promptly when due to the
appropriate taxing authority and indemnify, defend, and hold Lessor harmless
from and against any and all taxes (including gross receipts), assessments,
license fees and other federal, state or local governmental charges of any kind
or nature, together with any penalties, interest or fines related thereto
(collectively, "Taxes") that pertain to the Equipment, its purchase, or this
Lease, except such Taxes based solely upon the net income or capital of Lessor,
including, but not necessarily limited to all property, sales and/or use taxes
levied or assessed regardless of whether such taxes are levied or assessed
against Lessor or Lessee.
13.2. Lessor's Filing of Taxes. Notwithstanding the foregoing, Lessor at
its election may report and file sales and/or use tax reports, which are filed
and paid periodically through the Term, and the amounts so due may be invoiced
to Lessee and payable as specified therein, except if and to the extent Lessee
provides a resale or other sales tax exemption certificate.
14. Indemnification. Except for the negligence of Lessor, its employees or
agents and assigns, Lessee hereby assumes liability for and agrees to indemnify,
defend, protect, save and hold harmless the Lessor, its agents, employees,
directors and assignees from and against any and all losses, damages, injuries,
claims, administration of claims, penalties, demands and all expenses, legal or
otherwise (including reasonable attorneys' fees) of whatever kind and nature
arising from (a) the purchase, ownership, use, condition, operation or
maintenance of the Equipment, or (b) any agreement between Lessor and a vendor
(including purchase or sales orders) which was reasonably approved by Lessee, in
each case until the Equipment is returned to Lessor. Any claim, defense, setoff,
or other right of Lessee against any such indemnified party shall not in any way
affect, limit, or diminish Lessee's indemnity obligations hereunder. Each of
Lessor and Lessee shall notify the other party immediately as to any claim,
suit, action, damage, or injury related to the Equipment of which such party has
actual or other notice. Lessee shall, at its own cost and expense, defend any
and all suits within the scope of its indemnification obligation, including
frivolous suits and claims, which may be brought against Lessor and shall
satisfy, pay and discharge any and all judgments and fines that may be recovered
against Lessor in any such action or actions, provided, however, that Lessor
shall give Lessee written notice of any such claim or demand. Lessee agrees that
its obligations under this section shall survive the expiration or termination
of this Lease.
15. Representations, Warranties and Covenants. Lessee hereby represents and
warrants to Lessor that:
15.1. It is an entity duly organized, validly existing and in good standing
under the laws of the state of its formation;
15.2. Lessee's true legal name is as set forth in this Agreement and that
is shall not change its name or jurisdiction of organization without thirty (30)
days' written notice to Lessor;
15.3. It has the power and authority to execute, deliver and perform this
Agreement and other instruments and documents required or contemplated herein;
15.4. The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of Lessee, does not and will
not require the approval of any other interested parties of Lessee and does not
and will not contravene any Certificate or Articles of formation or internal
by-laws or agreement of Lessee, and does not constitute a default of any
indenture, contract, agreement, mortgage, deed of trust, document or instrument
to which Lessee is a party or by which Lessee is bound;
15.5. The person(s) executing this Agreement on behalf of Lessee has or
have been properly authorized to execute the same;
15.6. Lessee has obtained, maintains, and will maintain, on an active and
current basis, all licenses, permits, registrations, approvals and other
authority as may be required from any applicable federal, state, tribal and
local governments and agencies having jurisdiction over it and the subject
matter of this Agreement;
15.7. There are no suits, actions, proceedings or investigations pending
or, to Lessee's knowledge, threatened or, to Lessee's knowledge, any basis
therefor which might materially adversely affect the ability of it to perform
its obligations under this Agreement or have a material adverse effect upon the
financial condition of it or the validity or enforceability of this Agreement;
15.8. Except for cases no. 03-30038 and 03-30039 pending in the United
States Bankruptcy Court, Southern District of Florida, Lessee is not currently
the subject of any pending or threatened bankruptcy or insolvency proceeding;
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15.9. Lessee is not presently insolvent and this Agreement will not render
Lessee insolvent. As used in this section, the term "insolvent" means that the
sum total of all of Lessee's liabilities (whether secured or unsecured,
contingent or fixed, or liquidated or unliquidated) is in excess of the value of
Lessee's non-exempt assets (i.e. all of the assets of the entity that are
available to satisfy claims of creditors);
15.10. As of the date hereof, its obligations under this Agreement are not
subject to any defense, set off or counterclaim;
15.11. Lessee is not currently aware of any event, condition, fact or
circumstance, which, after the execution of this Agreement, would prevent Lessee
from having sufficient working capital to pay all of Lessee's debts as they
become due;
15.12. This Agreement constitutes the valid and legally binding agreement
of Lessee and is enforceable against Lessee in accordance with its terms, except
to the extent that enforcement of any remedies may be limited by applicable
bankruptcy, insolvency, general principles of equity or other similar laws
affecting generally the enforcement of creditor's remedies;
15.13. There have been no amendments, modifications, waivers or releases
with respect to this Agreement or any provisions hereof, whether oral or written
prior to execution hereof;
15.14. The Lessee's state of formation and/or the location of the Premises
will not be changed without thirty (30) days' prior written notice to Lessor;
and
15.15. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any
governmental, regulatory or public or tribal body or authority is required in
connection with Lessee's execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of this Agreement.
15.16. All financial statements concerning the Lessee and its guarantors
that have been delivered as of the date of this Agreement have been prepared in
accordance with GAAP consistently applied throughout the periods covered (except
as disclosed therein and except, with respect to unaudited financial statements,
for the absence of footnotes and normal year-end audit adjustments) and present
fairly in all material respects the financial position of the persons and
entities covered thereby as at the dates thereof and the results of such
person's or entities operations and cash flows for the periods then ended. Any
projections delivered to Lessor on or prior to the date of this Agreement have
been prepared by Lessee in light of the past operations of its businesses. Such
projections are based upon estimates and assumptions stated therein, all of
which Lessee believes to be reasonable and fair in light of current conditions
and current facts known to Lessee and, as of the date of this Agreement, reflect
Lessee's good faith and reasonable estimates of the future financial performance
of Lessee, the Vessel, the casino gaming operations and of the other information
projected therein for the period set forth therein.
15.17. Between the date of Lessee's most recent annual financial statements
and the date of this Agreement, (a) Lessee has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for charges, long-term
leases or unusual forward or long-term commitments which are not reflected in
the financial statements provided to Lessor and which, alone or in the
aggregate, could reasonably be expected to have a material adverse effect on the
financial condition of Lessee or Lessee's ability to perform its obligations
under this Lease, the Charter or any related documents ("Material Adverse
Effect"), (b) no contract, lease or other agreement or instrument has been
entered into by any Lessee or has become binding upon any Lessee's assets and no
law or regulation applicable to any Lessee has been adopted which has had or
could reasonably be expected to have a Material Adverse Effect, and (c) no
Lessee is in default and to the best of any Lessee's knowledge no third party is
in default under any contract, lease or other agreement or instrument, which
alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Between the date of Lessee's most recent annual financial
statements and the date of this Agreement, no event has occurred which, alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
15.18. As of the date of this Agreement (a) no strikes or other material
labor disputes against any Lessee are pending or, to any Lessee's knowledge,
threatened, (b) hours worked by and payment made to employees of each Lessee
comply with all federal, state, local or foreign law applicable to such matter,
(c) all payments due from any Lessee for employee health and welfare insurance
have been paid or accrued as a liability on the books of such Lessee, (d) there
is no organizing activity involving any Lessee pending or, to any Lessee's
knowledge, threatened by any labor union or group of employees, (e) there are no
representation proceedings pending or, to any Lessee's knowledge, threatened
with the National Labor Relations Board, and no labor organization or group of
employees of any Lessee has made a pending demand for recognition, and (f) there
are no complaints or charges against any Lessee pending or, to the knowledge of
any Lessee, threatened to be filed with any governmental authority or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by and Lessee of any individual.
15.19. As of the Closing Date, each Lessee owns or has rights to use all
trademarks, service marks, records, technology,
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inventions, know-how specifications, modifications, information, and any other
intellectual property necessary to continue to conduct its business as now or
heretofore conducted by it or proposed to be conducted by it ("Intellectual
Property"). Each Lessee conducts its business and affairs without infringement
of or interference with any Intellectual Property of any other person or entity
in any material respect. No Lessee is aware of any infringement claim by any
other person or entity with respect to any Intellectual Property.
15.20. As of the date of this Agreement, no Lessee is a party to any
contract or agreement with any governmental authority and no Lessee's accounts
(as defined in the United States Code) are subject to the Federal Assignment of
Claims Act (31 U.S.C. Section 3727), as amended, or any similar state or local
law.
15.21. No information contained in this Agreement, any of the other Lease
Documents, any projections, financial statements, or SEC filings or other
reports from time to time delivered hereunder or any written statement furnished
by or on behalf of any Lessee to Lessor contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.
15.22. Lessee shall not directly or indirectly, by operation of law or
otherwise merge, consolidate or otherwise combine with any sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation
or other entity (any of the foregoing, a "Person").
15.23. Lessee shall not create, incur, assume or permit to exist any
Indebtedness (as defined below) other than (i) Indebtedness existing on the date
hereof, (ii) Indebtedness incurred pursuant to the Lease, the Charter, that
certain Master Lease Agreement (Empress II and Palm Beach Princess Gaming
Equipment) ("Master Equipment Lease") of even date herewith between PDS Gaming
Corporation, a Minnesota corporation ("PDS"), and ITG Vegas, Inc., a Nevada
corporation ("ITG"), that certain Bareboat Charter and Option to Purchase
("Empress II Charter") of even date herewith among Cruise Holdings II, LLC, a
Nevada limited liability company ("Cruise II"), MJQ and PBE, that certain Master
Lease Agreement (Empress II Vessel) ("Empress II Master Lease") of even date
herewith among Cruise II, MJQ and PBE, as supplemented by any lease schedules
set forth therein and/or for the sole purposes of maintaining, expanding or
enhancing ITG's and its affiliates' business of operating the Vessel and that
certain Maritime Vessel named the Empress II (United States Official Number
998517) (the "Operations") (collectively, "Permitted Indebtedness") or (iii)
Indebtedness incurred by a subsidiary or affiliate of ITG for the purpose of
acquiring, maintaining, expanding or enhancing any business; provided, such
Indebtedness (if other than Permitted Indebtedness) is not created, assumed or
guaranteed by Lessee or ITG.
15.24. Lessee shall not create, incur, assume or permit to exist any
obligation guaranteeing any Indebtedness, lease, dividend, or other obligation
of any other Person in any manner (except for indorsement of items and
instruments in process of collection), other than the guaranty of Permitted
Indebtedness. For purposes of this Lease, "Indebtedness" means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to capital leases which is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
assets, real or personal property or services which purchase price is (a) due
more than six (6) months from the date of incurrence of the obligation in
respect thereof, or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any lien on any property or asset owned or held
by ITG or any of its subsidiaries regardless of whether the indebtedness secured
thereby shall have been assumed by such Person or is nonrecourse to the credit
of such Person.
16. Warranty, Disclaimers and Limitations of Liability.
16.1. Equipment. Lessor makes no warranties, express or implied, including,
but not limited to, warranties of merchantability or fitness for a particular
purpose with regard to any Equipment acquired by Lessor for lease to Lessee
hereunder from an Original Equipment Manufacturer or Supplier ("OEM"). No
affirmation of fact, including, but not limited to, statements regarding
suitability for use or performance of such Equipment shall be deemed to be a
warranty of Lessor for any purpose. All OEM warranties, if any, shall extend to
Lessee, subject to the terms and conditions of said OEM warranty and to the
extent as it may apply to any Equipment leased herein and, upon the request of
Lessee, Lessor shall cooperate with Lessee to enforce any OEM warranty.
16.2. Disclaimer and Limitations of Liability. Notwithstanding anything
herein to the contrary, Lessor shall not be responsible or liable for any
revenues foregone by the Lessee, while any part of the Equipment is not
functioning properly. Lessor shall also not be responsible or liable for any
losses, damages, injuries, claims, penalties, demands and all expenses, legal or
otherwise (including reasonable attorneys' fees) of whatever kind and nature
arising from any patron disputes involving such Equipment. The liability of
Lessor for any of the Equipment leased hereunder, whether in contract, in tort,
under warranty, in negligence or
Master Lease Agreement Page 7
otherwise, shall not exceed the fair market value of the Equipment itself and
under no circumstances shall Lessor be liable for direct, special, indirect, or
consequential damages, except for breach of Section 16.3 hereof, failure to
fulfill its obligations under Section 20.2 hereof and breach of Article 19.F. of
the Charter. Any unauthorized modification, alteration, or revision of all or
any portion of the Equipment shall cause the warranty described above to be null
and void. Lessor, its affiliates, subsidiaries, representatives, and agents make
no other warranty, express or implied. IN NO EVENT SHALL LESSOR BE LIABLE FOR
DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
LIMITATION LOSS OF PROFITS, ARISING OUT OF THIS LEASE, THE CHARTER OR ANY LEASE
SCHEDULE REGARDLESS OF THE NATURE OF ANY CLAIM MADE BY LESSEE, BUT EXCLUDING
DAMAGES RESULTING FROM LESSOR'S BREACH OF SECTION 16.3 OR FAILURE TO FULFILL ITS
OBLIGATIONS UNDER SECTION 20.2 HEREOF OR ARTICLE 19.F. OF THE CHARTER.
16.3. Covenant of Lessor. Lessor hereby covenants and agrees that Lessor
will not permit or suffer to exist any lien, claim, liability or other
encumbrance on or against the Equipment by, to or of any person or entity
claiming through Lessor, which impairs Lessee's rights to quiet enjoyment or the
purchase option under this Lease, except to the extent attributable to any Event
of Default by Lessee. Lessor shall and shall be entitled to a reasonable
opportunity to cure, contest or defend against any such lien, claim, liability
or other encumbrance.
16.4. Representations and Warranties of Lessor. Lessor hereby represents
and warrants to Lessee that:
16.4.1. It is an entity duly organized, validly existing and in good
standing under the laws of the state of its formation;
16.4.2. It has the power and authority to execute, deliver and perform
this Agreement and other instruments and documents required or contemplated
herein;
16.4.3. The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action on the part of Lessor, does not and
will not require the approval of any other interested parties of Lessor and does
not and will not contravene any Certificate or Articles of formation or internal
by-laws or agreement of Lessor, and does not constitute a material default of
any indenture, contract, agreement, mortgage, deed of trust, document or
instrument to which Lessor is a party or by which Lessor is bound;
16.4.4. The person(s) executing this Agreement on behalf of Lessor has
or have been properly authorized to execute the same;
16.4.5. This Agreement constitutes the valid and legally binding
agreement of Lessor and is enforceable against Lessor in accordance with its
terms, except to the extent that enforcement of any remedies may be limited by
applicable bankruptcy, insolvency, general principles of equity or other similar
laws affecting generally the enforcement of creditor's remedies;
16.4.6. Lessor has obtained, maintains, and will maintain, on an
active and current basis, all licenses, permits, registrations, approvals and
other authority as may be required from any applicable federal, state, tribal
and local governments and agencies having jurisdiction over it with respect to
the subject matter of this Agreement, except to the extent that the failure to
obtain and/or maintain any such licenses could not reasonably be expected to
have a material adverse affect on the ability of Lessor to perform its
obligations hereunder;
16.4.7. There are no suits, actions, proceedings or investigations
pending or, to Lessor's knowledge, threatened or, to Lessor's knowledge, any
basis therefor which might materially adversely affect the ability of it to
perform its obligations under this Agreement or have a material adverse effect
upon the financial condition of it or the validity or enforceability of this
Agreement; and
16.4.8. To the knowledge of Lessor, no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental, regulatory or public or tribal body or
authority is required in connection with the execution, delivery and performance
of, or the legality, validity, binding effect or enforceability of this
Agreement.
17. Assignment of Lease. Lessee acknowledges and agrees that Lessor may sell,
assign, mortgage, or otherwise transfer its interest hereunder and/or in the
Equipment to others ("Assignees") without any consent of Lessee, provided
however that Lessee shall be promptly notified of any assignment and that each
Assignee shall expressly take assignment subject to this Lease and the Charter
and agree to recognize Lessee's rights under this Lease, including expressly the
right to quiet enjoyment, use and possession of the Equipment so long as no
Event of Default exists under the Lease, during, and pursuant to Section 21.2
after, the term of this Lease; provided further that, notwithstanding the
foregoing, if such Assignee is PDS Funding 2004-A, LLC or any of its successors
or assigns,
Master Lease Agreement Page 8
such assignment shall be taken subject to the terms of that certain Notice,
Consent and Acknowledgment of Assignment or Sale of even date herewith by and
among Lessor, Lessee, PDS, Cruise II, ITG, ITG Palm Beach, LLC and International
Thoroughbred Breeders, Inc. Accordingly, Lessee and Lessor agree that upon such
assignment, Lessee (i) shall acknowledge such assignment in writing by executing
a Notice, Consent and Acknowledgment of Assignment furnished by Lessor; (ii)
shall promptly pay all Rent when due to the designated Assignees,
notwithstanding any defense, setoff, abatement, recoupment, reduction or
counterclaim whatsoever that Lessee may have against Lessor; (iii) shall not
permit the Lease, the Charter or any Lease Schedule so assigned to be amended or
the terms thereof waived without the prior written consent of the Assignees;
(iv) shall not require the Assignees to perform any obligations of Lessor under
such Lease Schedule; (v) shall not terminate or attempt to terminate the Lease,
the Charter or any Lease Schedule on account of any default by Lessor, so long
as such default does not result in the denial of Lessee's quiet enjoyment, use
and possession of the Equipment; and (vi) acknowledges that any Assignee may
reassign its rights and interest with the same force and effect as the
assignment described herein. Lessee shall not assign this Lease, the Charter or
any Lease Schedule or assign its rights in or sublet the Equipment, or any
interest therein, except pursuant to that certain Sub-Bareboat Charter of even
date herewith between Lessee and ITG, without Lessor's and its Assignee's prior
written consent, which consent shall not be unreasonably withheld.
18. Financial Information, Lease Agreement.
18.1. Financial Information. Lessee will provide Lessor monthly financial
statements within thirty (30) days of each calendar month and annual financial
statements provided within ninety (90) days of fiscal year-end. Throughout the
Term, upon the reasonable request of Lessor, Lessee shall deliver to Lessor
copies of other current financial information of Lessee and any parent entity of
Lessee, which will reflect the financial condition and operations of Lessee as
well as such other information regarding Lessee reasonably requested by Lessor
or its Assignees.
18.2. Lease Agreement. If any court of competent jurisdiction should
determine that this Lease constitutes a security arrangement as opposed to a
true lease, the parties then agree that this Lease shall constitute a security
agreement within the meaning of the Uniform Commercial Code and that the Lessor
shall be considered a secured party under the provisions thereof and shall be
entitled to all the rights and remedies of a secured party and Lessee, as
debtor, grants to Lessor, as secured party, a security interest in the
Equipment; provided nothing herein shall be construed nor shall the inclusion of
this paragraph be interpreted as derogating from the stated intent and
contractual understanding of the parties that this is a true lease.
19. Default by Lessee. Lessee shall be deemed in default under this Agreement
upon the occurrence of any one of the following events ("Event of Default"):
19.1. Failure to make any payment of Basic Rent or Cash Flow Sweep within
ten (10) days of when due under this Lease, the Charter and any Lease Schedule
by its due date;
19.2. Lessee's cancellation, termination, alteration, or rescission of the
Authorization for Automatic Payment without the prior approval of Lessor;
19.3. Lessee's rejection of any authorized withdrawal, payment or entry
permitted by the Authorization for Automatic Payment;
19.4. Failure to perform in any material respect any other obligation under
this Agreement, any Lease Schedule, Master Lease, Charter or any other written
agreement between Lessee and Lessor, regardless of whether such other agreement,
lease or charter covers the same or similar maritime vessel or gaming equipment,
within thirty (30) days after receipt of written notice of default and failure
to cure; provided, however, that no notice shall be required where a breach or
threatened breach would cause irreparable harm to Lessor and Lessor may
immediately seek equitable relief in a court of competent jurisdiction to enjoin
such breach;
19.5. Lessee shall generally fail to pay its debts as they become due,
shall make an assignment for the benefit of its creditors, shall admit in
writing its inability to pay its debts as they become due, shall file a petition
under any chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter existing, shall become "insolvent" as that term is
generally defined under the Federal Bankruptcy Code, shall in any involuntary
bankruptcy case commenced against it file an answer admitting insolvency or
inability to pay its debts as they become due, or shall fail to obtain a
dismissal of such case within one hundred twenty (120) days after its
commencement or convert the case from one chapter of the Federal Bankruptcy Code
to another chapter, or be the subject of an order for relief in such bankruptcy
case, or be adjudged a bankrupt or insolvent, or shall have a custodian, trustee
or receiver appointed for, or have any court take jurisdiction of its property,
or any part thereof, in any proceeding for the purpose of reorganization,
arrangement, dissolution or liquidation, and such custodian, trustee or receiver
shall not be discharged, or such jurisdiction shall not be relinquished, vacated
or stayed within sixty (60) days of the appointment;
19.6. Lessee materially defaults under any mortgage, indenture or
instrument under which there may be issued or by which
Master Lease Agreement Page 9
there may be secured or evidenced, any indebtedness of Lessee for money
borrowed, whether such indebtedness now exists or shall be created hereafter,
which material default (monetary or otherwise) is not cured within (30) days;
19.7. Lessee shall be dissolved, liquidated or wound up or is enjoined,
restrained, fails or is in any way prevented from maintaining its existence as a
going concern in good standing (excepting, however, reorganizations,
consolidations and/or mergers into or with, and sales to, affiliates owned by,
owning or under common control of or with Lessee and reorganizations,
consolidations and/or mergers resulting from the death of Xxxxxxx X. Xxxxxx);
19.8. Lessee attempts to remove, sell, transfer, encumber, part with
possession or sublet any part of the Equipment without the prior written consent
of Lessor other than in the ordinary course of business or as otherwise provided
in the Charter;
19.9. Any part of the Equipment, which is material to the operation of
Lessee's business or the functionality of the Vessel, is lost, stolen,
materially changed or destroyed, and is not replaced by Lessee within a
reasonable period of time;
19.10. Any part of the Equipment is attached, levied upon, encumbered,
pledged, or seized under any judicial process, unless attributable solely to
acts or debts of Lessor;
19.11. Any warranty or representation made or furnished to Lessor by or on
behalf of Lessee in this Lease, any Lease Schedule or the Charter is false or
misleading in any material respect when made or furnished;
19.12. Failure of Lessee to maintain in full force and effect the licenses,
permits and certifications that may be required under any applicable gaming laws
for the operation of Lessee 's business;
19.13. The revocation of any gaming license of Lessee;
19.14. The denial of any gaming license application of Lessee;
19.15. Failure of Lessee to comply with all applicable gaming statutes and
regulations;
19.16. Failure of Lessee to maintain the insurance required by this
Agreement; and/or
19.17. Any merger, consolidation, sale, change in control of Lessee (other
than a change in control resulting from the death of Xxxxxxx X. Xxxxxx) or any
transfer of a majority of Lessee's business or assets, without Lessor's prior
written consent, such consent not to be unreasonably withheld.
20. Lessor Remedies.
20.1. Lessee acknowledges that the enforcement of this Agreement may
require approval of certain regulatory authorities and copies of all Default
Notices, legal proceedings, etc. will be forwarded to the appropriate agency as
required by state law or regulation. Lessee further acknowledges that if any
Event of Default occurs and is continuing after the expiration of any applicable
cure period, Lessor may, in addition to any and all rights and remedies it may
have at law or in equity, without notice to or demand upon any party to this
Agreement and at its sole option, terminate this Lease, all Lease Schedules and
the Charter and thereafter, if Lessor has not received notice from Lessee
pursuant to Section 21.2 of its intent to exercise its option thereunder or, if
such notice is received but Lessee does not consummate the purchase within
thirty (30) days:
20.1.1. Declare all amounts remaining unpaid under this Agreement,
including without limitation the Casualty Value as defined in Section 21.2,
immediately due and payable and interest shall accrue on any outstanding balance
due Lessor at a rate of 3% per annum, until paid in full;
20.1.2. Proceed by appropriate court action or other proceeding,
either at law or in equity to enforce performance by Lessee of any and all
covenants of this Agreement;
20.1.3. Enter onto Lessee's premises or the Premises in person or by
agent and take possession of the Equipment;
20.1.4. Require Lessee to return the Equipment, at Lessee's expense,
to a place reasonably designated by Lessor;
20.1.5. Render the Equipment unusable in such manner as is reasonable
under the circumstances and as may be allowed by applicable law;
20.1.6. Dispose of the Equipment in a commercially reasonable manner,
as Lessor in the good faith exercise of its discretion deems necessary or
appropriate;
Master Lease Agreement Page 10
20.1.7. Without demand, advertisement or notice of any kind (except
such notice as may be required under Article 9 of the Uniform Commercial Code as
if it were to apply, and all of which are, to the extent permitted by law,
hereby expressly waived), sell, resell, lease, re-lease or dispose of the
Equipment in any commercially reasonable manner;
20.1.8. If not already the property of Lessor, purchase the Equipment
at public sale with credit on any amounts owed;
20.1.9. If not already the property of Lessor, purchase the Equipment
at private sale for a price and on such terms as is determined by an independent
appraiser appointed by Lessor to be the price and terms at which a willing
seller would be ready to sell to an able buyer;
20.1.10. Proceed immediately to exercise each and all of the powers,
rights, and privileges reserved or granted to Lessor under this Agreement;
20.1.11. Subject to applicable and appropriate gaming laws, rules,
laws and regulations, and required approvals, take possession, sell and/or
re-lease any unit of the Equipment as Lessor may desire, in its sole discretion
without demand or notice, wherever the same may be located, without any court
order or pre-taking hearing, any and all damages occasioned by such retaking
being specifically waived herein by Lessee;
20.1.12. Take control of any and all proceeds to which Lessee is
entitled;
20.1.13. Exercise any other remedies available to a Lessor under the
Uniform Commercial Code, if applicable;
20.1.14. Immediately seek equitable relief in a court of competent
jurisdiction to enjoin a breach of this Agreement where said breach or
threatened breach would cause irreparable harm to Lessor; and/or
20.1.15. Exercise any other rights or remedies provided or available
to Lessor at law or in equity.
20.2. Notwithstanding anything to the contrary contained in this Lease and
notwithstanding that this transaction shall constitute an operating lease,
Lessor and Lessee agree that the respective rights, remedies and obligations of
the parties following an Event of Default shall be subject to Article 9 of the
Uniform Commercial Code ("UCC") as in effect in the State of Nevada, the same as
if the Lessor were a secured party, even if Article 9 would not otherwise be
applicable. Without limiting the generality of the foregoing, any public or
private sale, lease or other disposition of the Equipment shall comply with
Section 9-610 of the UCC, and distribution of proceeds of sale, lease or other
disposition, including without limitation application of surplus proceeds, shall
be in accordance with Section 9-608 of the UCC. Lessor further agrees that any
public or private sale, lease or other disposition of the Equipment to any party
other than Lessee shall occur at least forty-five (45) days after the date such
Event of Default first occurred.
20.3. With respect to any exercise by Lessor of its right to recover and/or
dispose of the Equipment under this Lease, the Charter or any Lease Schedule,
Lessee acknowledges and agrees as follows: (i) Lessor shall have no obligation,
subject to the requirements of commercial reasonableness, to clean-up or
otherwise prepare the Equipment for disposition, (ii) Lessor may comply with any
applicable state, federal, international or maritime law requirements in
connection with any disposition of the Equipment and any actions taken in
connection therewith shall not be deemed to have adversely affected the
commercial reasonableness of any disposition of such Equipment, (iii) If Lessor
purchases any of the Equipment at public or private sale, Lessor may pay for the
same by crediting some or all of Lessee's obligations under this Lease, the
Charter or any Lease Schedule.
20.4. No waiver by Lessor, its affiliates, successors or assigns, of any
default, including, but not limited to, acceptance of late payment after the
same is due, shall operate as a waiver of any other default or of the same
default on a future occasion. In the Event of Default, Lessor shall be entitled
to recover all costs, expenses, losses, damages and legal costs (including
reasonable attorneys' fees) reasonably incurred by Lessor in connection with the
enforcement of Lessor's remedies. All rights and remedies of Lessor are
cumulative and are in addition to any other remedies provided for at law or in
equity, including the Uniform Commercial Code, if applicable, and may, to the
extent permitted by law, be exercised concurrently or separately. A termination
hereunder shall occur only upon written notice by Lessor to Lessee and no
repossession or other act by Lessor after default shall relieve Lessee from any
of its obligations to Lessor hereunder unless Lessor so notifies Lessee in
writing.
20.5. In the event of a default by Lessee, Lessor may, at its option,
declare this Agreement terminated without further liability or obligation to
Lessee other than as provided in Section 21.2.
21. Compliance with Governmental Agencies.
21.1. All services furnished hereunder shall comply with the requirements
of all governmental authorities having jurisdiction (the "Authorities"). The
terms and conditions of the Lease, the Charter or any Lease Schedule shall be
subject to the approval by the
Master Lease Agreement Page 11
Authorities, if such approval is so required. Lessee agrees to comply with all
material requirements of all Authorities applicable to it or its business. It is
understood that, if at any time either prior to or subsequent to the initial
starting date of the Lease, the Charter or any Lease Schedule, the Authorities
shall render a final determination either disapproving the terms and conditions
of the Lease, the Charter or any Lease Schedule or denying the application of
Lessor for a gaming license, vendor registration or casino service supplier, as
a result, directly or indirectly, of this Lease, the acts or omissions of Lessee
or the identity, acts or omissions of persons or entities affiliated with
Lessee, or if Lessor already has such a license, the qualifications of Lessor
that then, in either of such events, the Lease, the Charter or any Lease
Schedule shall be deemed terminated, as of the date of such disapproval or
denial, as though such date were the date originally fixed herein for the notice
of termination of the Lease, the Charter or any Lease Schedule.
21.2. If the Lease, the Charter or any Lease Schedule is terminated for any
reason prior to expiration of the Term (including, without limitation, as a
result of an Event of Default), then Lessee shall have the option to purchase
the Equipment by providing written notice to Lessor within ten (10) days after
termination and tendering payment to Lessor within thirty (30) days after
termination of (i) any amounts then due and owing under the Lease and any lease
schedule, including but not limited to such items as rent, late charges, and
taxes paid by or assessed upon Lessor, and (ii) the amount equal to the Casualty
Value, as set forth in the Lease Schedule, and Lessor shall transfer title to
the Equipment to Lessee and in that event the parties hereto shall have no
further liability to each other. In the event Lessee does not exercise its
option to purchase the Equipment in accordance with this Section 21.2, Lessor
shall sell the Equipment within a reasonable period of time and distribute the
proceeds of such sale in accordance with Article 9 of the UCC.
22. Waiver of Jury Trial. The parties hereby knowingly and voluntarily waive
their right to a jury trial on any claim or cause of action based upon or
arising out of, directly or indirectly, this Lease, the Charter or any Lease
Schedules, any dealings between the parties relating to the subject matter
hereof or thereof, and/or the relationship that is being established between the
parties. The scope of this waiver is intended to be all encompassing of any and
all disputes that may be filed in any court (including, without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims). This waiver may not be modified orally, and the waiver
shall apply to any subsequent amendment, renewals, supplement or modifications
to this Lease. In the event of litigation, this Lease may be filed as a written
consent to a trial by the court.
23. Miscellaneous.
23.1. Amendments or Modifications. This Lease shall not be modified or
amended except by an instrument in writing signed by or on behalf of the parties
hereto.
23.2. Binding Effect. This Lease shall be binding upon and inure to the
benefit of the parties and their respective, permitted successors, heirs,
executors, administrators, assigns, and all persons claiming by, through or
under them.
23.3. Captions, Headings and Titles. The captions, headings and titles of
the various sections of this Lease are for convenience only and are not to be
construed as confining or limiting in any way the scope or intent of the parties
or the provisions hereof. Whenever the context requires or permits, the singular
shall include the plural, the plural shall include the singular and the
masculine, feminine and neuter shall be freely interchangeable.
23.4. Compliance with All Laws. Neither party shall violate any law or
regulation including, without limitation, any gaming law or regulation or to
engage in any act or omission which tends to bring discredit upon the gaming
industry or otherwise jeopardizes the other party's ability to engage in
business with businesses licensed by any applicable regulatory authorities. Each
party shall use its good faith judgment in determining whether any such
violation, act or omission of the other party or its directors, officers or
managers, if any, places such party's business or licenses at risk and upon such
determination such party shall have the right to immediately terminate this
Lease, the Charter or any Lease Schedule without further liability to the other
party, other than as provided in Section 21.2.
23.5. Conduct. Lessee acknowledges that Lessor, its subsidiaries and
affiliates, have a positive reputation in the finance and gaming industry and
that Lessor and its subsidiaries and affiliates are subject to regulation and
licensing and desire to maintain their reputation and receive positive
publicity. Lessee therefore agrees that throughout the Term, Lessee`s directors,
officers and managers will not conduct themselves in any manner that materially
adversely affects or is detrimental to, Lessor, its subsidiaries or affiliates,
and will not directly or indirectly make any oral, written or recorded private
or public statement or comment that is disparaging, critical or defamatory of
Lessor or its subsidiaries or affiliates. Lessor shall use its good faith
business judgment in determining whether the conduct of Lessee`s directors,
officers or managers materially adversely affects Lessor, its subsidiaries or
affiliates, and upon such determination Lessor shall have the right to
immediately terminate this Lease, the Charter or any Lease Schedules without
further liability to Lessee.
23.6. Confidentiality. Lessor and Lessee and their respective employees
shall keep all statistical, financial, confidential,
Master Lease Agreement Page 12
and/or personal data with respect to the other party requested, received,
developed, stored or viewed by Lessor or Lessee in connection with this
Agreement in the strictest confidence. Lessor and Lessee agree not to divulge to
third parties, without the written consent of the other party, any such
information unless: [i] the information is known to the disclosing party prior
to obtaining the same; [ii] the information is, at the time of disclosure by the
disclosing party, then in the public domain; [iii] the information is obtained
by the disclosing party from a third party who did not receive same, directly or
indirectly from the disclosing party and who has no obligation of secrecy with
respect thereto; or [iv] the disclosing party is obligated to divulge the
information to a governmental or regulatory authority having competent
jurisdiction over the disclosing party or its business, provided that in such
event the disclosing party shall provide the other party with prior written
notice and upon the non-disclosing party's request cooperate with such party to
prevent such disclosure.
23.7. Counterparts. This Lease may be executed in as many counterparts as
may be deemed necessary and convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed or otherwise
authenticated, shall be deemed to be an original, but all such counterparts
together shall constitute but one and the same document.
23.8. Effective Only Upon Execution by Authorized Officer. Neither this
Lease nor any Lease Schedule shall be deemed to constitute an offer or be
binding upon Lessor or Lessee until executed by their respective authorized
officers. No representations made by any Lessor's salespersons or anyone else
shall be binding unless incorporated herein in writing.
23.9. Entire Agreement. This Lease, the Charter, any Lease Schedules,
mortgages and related instruments executed in connection therewith constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, promises, negotiations,
representations or understandings, whether written or oral, between the parties
hereto relating to the subject matter of this Lease, the Charter or any Lease
Schedules. Any prior agreements, promises, negotiations, representations or
understandings, either oral or written, not expressly set forth in this Lease,
any Lease Schedule, or related instruments executed in connection therewith
shall no force or effect. 23.10. Further Assurances. The parties further
covenant and agree to do, execute and deliver, or cause to be done, executed and
delivered, and covenant and agree to use their best efforts to cause their
successors and assigns to do, execute and deliver, or cause to be done, executed
and delivered, all such further acts, transfers and assurances, for implementing
the intention of the parties under this Agreement, as the parties reasonably
shall request. The parties agree to execute any additional instruments or
agreements necessary to carry out the intent of this Lease.
23.11. Governing Law. The substantive and procedural laws of the State of
Nevada and applicable federal law shall govern the validity, construction,
interpretation, performance and enforcement of this Agreement and the parties
agree to jurisdiction in Nevada without reference to its conflict of laws
provisions regardless of the location of the Equipment. The parties also hereby
agree that any action and/or proceeding in connection with this Agreement shall
only be brought in the venue of Xxxxx County, Nevada.
23.12. Governing Law (Sovereign Nations Only). In the event that Lessee is
an Indian Tribe as defined by the Indian Gaming Regulatory Act, 25 U.S.C.
ss.2701 et seq. or a sovereign nation, the parties agree that the immediate
section above shall be null and void and Lessee hereby grants a limited waiver
of its Sovereign Immunity, for the sole benefit of Lessor, such waiver being
limited to actions or claims by Lessor against Lessee, or by Lessee against
Lessor, which shall arise directly from, or are related to, this Agreement. Any
action brought by or against Lessor may be brought only in the United States
District Court most near Lessee`s primary place of business regardless of the
location of the Equipment. The law to be applied by said United States District
Court in any such action shall be the law of the State of Nevada, including the
Uniform Commercial Code, as adopted by the State of Nevada, without reference to
any Nevada choice of law provisions. Without in any way limiting the generality
of the foregoing, Lessee expressly authorizes any governmental or other agency
authorities who have the right and duty under applicable law to take any and all
action authorized or ordered by any court, including without limitation,
entering the land of Lessee and repossessing the Equipment or otherwise giving
effect to any judgment entered. It is the intent of the parties that Lessor will
be able to obtain possession of the Equipment in accordance with the rights
afforded it under applicable laws and/or any court order.
23.13. Governmental Regulations. Notwithstanding anything in this Lease,
the Charter or any Lease Schedule to the contrary, in the event any federal,
state, local or other governmental body's statutes, laws, rules, or regulations
are enacted/promulgated, the impact of which will materially impact the methods
and/or costs of Lessor under this Lease, the Charter or any Lease Schedule,
then, in that event, Lessor, upon written notice to Lessee, may request a
renegotiation of this Lease, the Charter or any Lease Schedule. Any
modifications to this Lease, the Charter or any Lease Schedule resulting from
such renegotiation shall become effective on the latest date as permitted by the
governmental body. In the event the parties are unable to reach a satisfactory
agreement during said renegotiations, Lessor shall have the right to cancel the
Lease, the Charter and all Lease Schedules at any time by not less than 60 days
prior written notice to Lessee, whereupon the Lease, all Lease Schedules and the
Charter shall be null and void and Lessee shall have the rights described in
Section 21.2.
Master Lease Agreement Page 13
23.14. Independence of Parties. All persons hired or employed by each party
in the discharge of this Lease shall be considered employees of that party and
not of any other party to this Lease and shall be solely and exclusively under
the hiring or employing party's direction and control. Neither party nor any of
its employees [i] shall be held or deemed in any way to be an agent, employee or
official of the other party, or [ii] shall have the authority to bind the other
party in any manner whatsoever. Each party further agrees to have all persons
employed by it properly covered by worker's compensation or employer's liability
insurance, as required by law and to assume and pay at its own cost all taxes
and contributions required by an employer under any and all unemployment
insurance, old age pensions, and other applicable so-called Social Security
Acts.
23.15. Intellectual Property Rights not conveyed. Nothing in this Lease
shall be construed as to grant or convey to Lessee any right, title or interest
in and to any intellectual property rights (including software, patent,
copyright and/or trademark) to any part of the Equipment.
23.16. Lease Irrevocable. This Lease is irrevocable for the full Term
hereof and the Rent shall not xxxxx by reason of termination of Lessee's right
of possession and/or the taking of possession by the Lessor or for any other
reason; provided, however, that nothing in this Section 23.16 shall be construed
as limiting Lessor's or Lessee's right to terminate this Lease, any Lease
Schedule and/or the Charter prior to the expiration of the Term in accordance
with the provisions of this Lease, the Lease Schedules and/or the Charter.
23.17. License and Permits. Each party shall obtain and maintain on an
active and current basis, all licenses, permits, registrations, approvals and
other authority as may be required from any applicable federal, state, tribal
and local governments and agencies having jurisdiction over the subject matter
of this Lease and any Lease Schedule.
23.18. Multiple Second Parties. If more than one Lessee is named in this
Lease or a Lease Schedule the liability of each shall be joint and several.
Lessor may bring and prosecute a separate action against separate, individual
Lessees to enforce any one or more Lessees' liability hereunder, whether or not
any action is brought against any other Lessee or any other person and whether
or not any Lessee or any other person is joined in such action or actions.
Nothing shall prohibit Lessor from exercising its rights against any separate
Lessee and any other person simultaneously, jointly and/or severally. Each
Lessee shall be bound by each and every ruling, order and judgment obtained by
Lessor against any Lessee in respect of the obligations, whether or not such
Lessee is a party to the action or proceeding in which such ruling, order or
judgment is issued or rendered.
23.19. No Joint Venture, Partnership or Agency Relationship. Neither this
Lease nor any Lease Schedule shall create any joint venture or partnership
between the parties. Nothing contained in this Lease and any Lease Schedule
shall confer upon either party any proprietary interest in, or subject a party
to any liability for or in respect of the business, assets, profits, losses or
obligations of the other. Nothing herein contained shall be read or construed so
as to make the parties a partnership, nor shall anything contained herein be
read or construed in any way to restrict the freedom of either party to conduct
any business or activity whatsoever without any accountability to the other
party. Neither party shall be considered to be an agent or representative of the
other party or have any authority or power to act for or undertake any
obligation on behalf of the other party except as expressly authorized by the
other party in writing. Any such unauthorized representation or action shall be
considered a breach of this Lease and any Lease Schedule.
23.20. Nondiscrimination. Neither party shall discriminate against any
person on the basis of race, color, sex, national origin, disability, age,
religion, handicapping condition (including AIDS or AIDS related conditions), or
any other class protected by United States federal law or regulation.
23.21. Non-Party Beneficiaries. Nothing herein, whether express or implied
shall be construed to give any person other than the parties, and their
successors and permitted assigns, any legal or equitable right, remedy of claim
under or in respect of this Lease and any Lease Schedule; but this Lease and any
Lease Schedule shall be held to be for the sole and exclusive benefit of the
parties, and their successors and assigns.
23.22. Notices. Except as otherwise required by law, all notices required
herein shall be in writing and sent by prepaid certified mail or by courier,
addressed to the party at the address of the party specified herein or such
other address designated in writing. Notices are deemed to have been received
[i] on the fourth business day following posting thereof in the U.S. Mail,
properly addressed and postage prepaid, [ii] when received in any medium if
confirmed or receipted for in the manner customary in the medium employed, or
[iii] if acknowledged in any manner by the party to whom the communication is
directed.
23.23. Privileged Licenses.
23.23.1. Lessee acknowledges that Lessor, its parent company,
subsidiaries and affiliates, are businesses that are or may be subject to and
exist because of privileged licenses issued by governmental authorities. If
requested to do so by Lessor, Lessee,
Master Lease Agreement Page 14
and its agents, employees and subcontractors, shall obtain any license,
qualification, clearance or the like which shall be reasonably requested or
required of any of them by Lessor or any regulatory authority having
jurisdiction over Lessor or any parent company, subsidiary or affiliate of
Lessor. If Lessee, or its agents, employees, or subcontractors, fails to satisfy
such requirement or if Lessor or any parent company, subsidiary or affiliate of
Lessor is directed to cease business with Lessee or its agents, employees or
subcontractors by any such authority, or if Lessor shall in good faith
determine, in Lessor's sole and exclusive judgment, that Lessee, or any of its
agents, employees, subcontractors, or representatives [i] is or might be engaged
in, or is about to be engaged in, any activity or activities, or [ii] was or is
involved in any relationship, either of which could or does jeopardize Lessor's
business or such licenses, or those of a parent company, subsidiary or
affiliate, or if any such license is threatened to be, or is, denied, curtailed,
suspended or revoked, this Lease, all Lease Schedules and the Charter may be
immediately terminated by Lessor without further liability to Lessee other than
as provided in Section 21.2.
23.23.2. Lessee further acknowledges its understanding that it is
illegal for a denied gaming license applicant or a revoked gaming licensee, or a
business entity under such a person's control, to enter or attempt to enter into
a contract with Lessor, its parent company, subsidiaries or any affiliate,
without the prior approval of the Nevada Gaming Commission or other applicable
gaming authorities. Lessee affirms that it is not such a person or entity and
that it is not under the control of such a person; and agrees that this Lease,
all Lease Schedules and the Charter are each subject to immediate termination by
Lessor, without further liability to Lessee, other than as provided in Section
21.2, if Lessee is or becomes such a person or entity or is under the control of
such a person.
23.24. Pronouns. Masculine or feminine pronouns shall be substituted for
the neuter form and vice versa, and the plural shall be substituted for the
singular form and vice versa, in any place or places herein in which the context
requires such substitution or substitutions.
23.25. Regulatory Approvals. Certain transactions contemplated by this
Lease and any Lease Schedule may require the approval of governmental regulatory
authorities. Those transactions are entirely conditional upon and subject to the
prior approval of such authority. If the transactions are not so approved, they
shall be null and void ab initio. The parties shall cooperate with one another
and move promptly with due diligence and in good faith to request any required
or appropriate regulatory approvals. If the action or inaction of any
governmental regulatory authority renders the parties unable to consummate any
transaction contemplated by this Lease and any Lease Schedule which thereby
denies a party a material benefit contemplated by this Lease and any Lease
Schedule resulting in the unjust enrichment of the other party, the parties
shall negotiate in good faith an amendment to this Lease and any Lease Schedule
which fairly compensates the party denied the benefit.
23.26. Riders. In the event that any riders are attached hereto and made a
part hereof and if there is a conflict between the terms and provisions of any
rider, including any Lease Schedule and the terms and provisions herein, the
terms and provisions of the rider or Lease Schedule shall control to the extent
of such conflict.
23.27. Setoffs. The monies owed by Lessee herein shall be paid in full when
due under the terms of this Lease and any Lease Schedule without right of setoff
of any monies owed by Lessor to Lessee under any other agreement or for any
other purpose.
23.28. Severability. Each term, covenant, condition or provision of this
Lease and any Lease Schedule shall be viewed as separate and distinct, and in
the event that any such term, covenant, condition or provision shall be held by
a court of competent jurisdiction to be invalid, the remaining provisions shall
continue in full force and effect.
23.29. Suitability. Lessee understands and acknowledges that this Lease,
the Charter and any Lease Schedule, at Lessor's discretion, may be subject to
Lessee and its principals completing and submitting to Lessor a due diligence
compliance questionnaire (including an Authorization for the Release of
Information) and being found suitable by Lessor's Compliance Committee.
Notwithstanding any other provision in this Lease and any Lease Schedule to the
contrary, Lessor may terminate this Lease, the Charter and any Lease Schedule
without further obligation or liability to Lessee if, in the judgment of
Lessor's Compliance Committee, the relationship with Lessee or its principals
could subject Lessor to disciplinary action or cause Lessor to lose or become
unable to obtain or reinstate any federal, state and/or foreign registration,
license or approval material to Lessor's business or the business of any Lessor
subsidiary.
23.30. Survival of Indemnities. All indemnities of Lessee shall survive and
continue in full force and effect for events occurring prior to the return of
the Equipment to the Lessor, notwithstanding the expiration or termination of
the Term.
23.31. Time Periods. In the event the provisions of this Lease, the Charter
or any Lease Schedule require any act to be done or to be taken hereunder on a
date which is a Saturday, Sunday or legal holiday, such act or action shall be
deemed to have been validly done or taken on the next succeeding day which is
not a Saturday, Sunday or legal holiday.
Master Lease Agreement Page 15
23.32. Waiver. The failure of any party to insist, in any one or more
instances, upon performance of any of the provisions of this Lease, the Charter
or any Lease Schedule or to take advantage of any of its rights hereunder shall
not operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right or power. Accordingly, the acceptance
of rent by Lessor after it is due shall not be deemed to be a waiver of any
breach by Lessee of its obligations under this Lease, the Charter or any Lease
Schedule.
Master Lease Agreement Page 16
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date set forth above.
LESSEE: LESSOR:
PALM BEACH MARITIME CORPORATION, CRUISE HOLDINGS I, LLC, a Nevada limited
formerly named MJQ CORPORATION, liability company
a Delaware corporation
By:/S/Xxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: President Its: President
LESSEE:
PALM BEACH EMPRESS, INC.,
a Delaware corporation
By:/S/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Its: President
Master Lease Agreement Page 17
Transaction No. 1188-L01-01
LEASE SCHEDULE NO. 1
(PALM BEACH PRINCESS VESSEL)
(With Options)
THIS LEASE SCHEDULE NO. 1 (PALM BEACH PRINCESS) ("Lease Schedule") is
attached to and made a part of the Master Lease Agreement ("Lease") of even date
herewith between CRUISE HOLDINGS I, LLC, a Nevada limited liability company, its
successors and assigns ("Lessor"), and PALM BEACH MARITIME CORPORATION, formerly
named MJQ CORPORATION, a Delaware corporation ("MJQ") and PALM BEACH EMPRESS,
INC., a Delaware corporation ("PBE"), jointly and severally (MJQ and PBE are
hereinafter collectively referred to as, the "Lessee").
1. Definitions. Terms not otherwise defined in this Lease Schedule shall have
the meaning attributed to such terms in the Lease.
2. Description of Equipment. The equipment listed on Attachment "A" to this
Lease Schedule (the "Equipment") is added to the equipment leased under the
Lease consisting of the Palm Beach Princess Casino Cruise Ship Vessel (Panama
No. 14348-84-E and IMO No. 8402937) and made subject to the provisions of the
Lease. The capitalized cost of the Equipment is $14,000,000.00 ("Capitalized
Equipment Cost").
3. Commencement Date. The Commencement Date for the Equipment leased under
this Lease Schedule shall be the Acceptance Date set forth in the Certificate of
Delivery and Acceptance executed by Lessee in connection with this Lease
Schedule.
4. Term. The Term shall commence on the Commencement Date and shall continue
for (60) consecutive months. This Lease Schedule shall be non-cancelable, except
upon prepayment permitted under the Charter, for the duration of the Term or any
Renewal Term (defined below).
5. Basic Rent And Payments. The Basic Rent ("Basic Rent") due each month
during the Term for the Equipment shall be the Charter Hire due and payable
under the Charter, and payment of the Charter Hire in accordance with the
Charter shall constitute payment of the Basic Rent hereunder.
6. Fees And Charges.
a. Origination and Documentation Fee. Lessee agrees to pay to Lessor
Origination and Documentation Fees as set forth in the Lease.
b. Closing Fee. Lessee agrees to pay to Lessor a Closing Fee for this Lease
Schedule in an amount equal to two and one-half percent (2.5%) of the
Capitalized Equipment Cost, or $350,000.00.
c. Imposts. In addition to the monthly Basic Rent due as set forth above,
Lessee agrees to pay and indemnify Lessor for, and hold Lessor harmless from and
against all taxes, assessments, fees and charges (hereinafter called "Imposts")
together with any penalties, fines or interest thereon levied and imposed by any
governmental agency or unit (state, local, federal, domestic or foreign) in
accordance with the terms of the Charter.
7. Security Deposit. Due and payable on the Commencement Date, Lessee shall
pay to Lessor, a Security Deposit in an amount equal to One Hundred
Seventy-Eight Thousand Dollars (US$178,000.00). The Security Deposit will be
held by the Lessor for the Term of the Lease and will be, at Lessor's sole
discretion, either (i) returned to Lessee upon satisfactory completion of the
terms and conditions of the Lease; or (ii) if Lessee is not in default under the
Term (initial and/or renewed, if applicable) of the Lease or this Lease
Schedule, applied to Lessee's final payment of Basic Rent.
8. Residual Cash Flow Sweep. Lessee shall make an annual cash flow sweep
("Cash Flow Sweep") payment in accordance with, and with the effect provided in,
the Charter. Lessor and Lessee acknowledge and agree that the Lease is a capital
lease at any time during the Term in which the net present value of the
remaining Basic Rent payments, combined with the Cash Flow Sweep.
9. Cash Flow Sweep Account. At the end of each quarter of each fiscal year,
Lessee shall deposit a certain portion of year to date EBITDA into an account
for the benefit of Lessor, in accordance with the Charter and the applicable
account control agreement, which deposit shall be held in such account pursuant
to the terms of the Charter.
Lease Schedule Page 1
10. Casualty Value. After the conclusion of the thirteenth (13th) month of
the Term or at any time upon an actual or constructive total loss of the
Equipment, Lessee may prepay any amounts or obligations due under the Lease or
this Lease Schedule (the "Casualty Value") in accordance with the Casualty Value
Schedule, attached hereto as Schedule A.1. Lessee shall submit, at Lessee's
option, the full pre-payment amount to Lessor on the fifteenth (15th) day of the
month; provided, however, Lessee shall have previously made such month's Basic
Rent payment in accordance with the Lease and this Lease Schedule.
11. Options and Notice.
a. Lessor grants Lessee the following option(s):
(i) Purchase Option: Upon any termination of the Lease (including any
termination thereof caused by the default of Lessee), Lessee may purchase all
but not less than all of the Equipment described in the Lease Schedule for the
applicable Casualty Value in accordance with the Charter (the "Purchase
Option"). In addition, upon reduction of the Casualty Value to zero and payment
of all sums owing under the Master Lease and the Charter, Lessee shall be
deemed, without further action, to have exercised the Purchase Option and Lessee
shall convey title to the Equipment in accordance with the terms of the Charter.
(ii) Option to Return Equipment: At the expiration of the Term, Lessee
may return the Equipment to Lessor in accordance with the Charter (the "Return
Option").
b. Lessee acknowledges that the Equipment sold by Lessor under the
Purchase Option is being sold in an "as is, where is" condition. Except as
otherwise provided in Article 19 of the Charter, Lessor makes, and will make, no
representations or warranties regarding the Equipment, its suitability for
Lessee's purpose, or its compliance with any laws. Lessee hereby assumes all
liability for the Equipment and agrees to indemnify Lessor per the terms of the
Lease and the Charter.
12. UCC Filings. Lessee hereby ratifies any and all UCC-1 and/or UCC-3
statements and/or amendments thereto related to this Lease Schedule or the
Equipment previously filed by Lessor and authorizes Lessor to file any and all
UCC-1 and/or UCC-3 statements and/or amendments thereto related to this Lease
Schedule or the Equipment, without Lessee's authentication, to the extent
permitted by applicable law.
13. Intentionally Omitted.
14. Incorporation of Lease and Charter. All of the provisions of the Lease
and Charter are incorporated by reference herein as if set forth fully herein.
In the event of any conflict between the terms and conditions of this Schedule
and the terms and conditions of either the Lease or the Charter, the terms and
provisions of the Lease or the Charter shall control.
Lease Schedule Page 2
Dated this 6th day of July, 2004.
LESSEE: LESSOR:
PALM BEACH MARITIME CORPORATION, CRUISE HOLDINGS I, LLC, a Nevada
formerly named MJQ CORPORATION, limited liability company
a Delaware corporation
By:/S/Xxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: President Its: President
LESSEE:
PALM BEACH EMPRESS, INC.
By:/S/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Its: President
Lease Schedule Page 3
ATTACHMENT A
PALM BEACH PRINCESS
The PALM BEACH PRINCESS is the Ship and General Improvement at and on the
maritime vessel named the PALM BEACH PRINCESS, a Panamanian flag casino cruise
ship, Panama No. 14348-84-E and IMO No. 8402937, built in Finland in 1964, with
Call Letters 3FNQ2, of 6,659.00 gross registered tons and 2,499.00 net
registered tons, 97.03m of length, 16.40m of breadth and 7.91m of depth. General
Improvements shall mean all equipment and FF&E as defined in Section 1250 of the
United States Internal Revenue Service Publication 946, where the equipment and
FF&E is considered a structural component or critical operating component of the
vessel.
Lease Schedule Page 4
------------------------------------------------------------------------------
SCHEDULE A-1
CASUALTY VALUE SCHEDULE
Palm Beach Princess
------------------------------------------------------------------------------
Month Principal Premium Total Casualty Payment
------ -------------- -- ------ - --------------- -- ------------------------
13 13,786,737.20 7% 965,071.60 14,751,808.80
------ -------------- -- ------ - --------------- -- ------------------------
14 13,570,755.30 7% 949,952.87 14,520,708.17
------ -------------- -- ------ - --------------- -- ------------------------
15 13,352,019.63 7% 934,641.37 14,286,661.00
------ -------------- -- ------ - --------------- -- ------------------------
16 13,130,495.08 7% 919,134.66 14,049,629.74
------ -------------- -- ------ - --------------- -- ------------------------
17 12,906,146.09 7% 903,430.23 13,809,576.32
------ -------------- -- ------ - --------------- -- ------------------------
18 12,678,936.65 7% 887,525.57 13,566,462.22
------ -------------- -- ------ - --------------- -- ------------------------
19 12,448,830.29 7% 871,418.12 13,320,248.41
------ -------------- -- ------ - --------------- -- ------------------------
20 12,215,790.08 7% 855,105.31 13,070,895.39
------ -------------- -- ------ - --------------- -- ------------------------
21 11,979,778.60 7% 838,584.50 12,818,363.10
------ -------------- -- ------ - --------------- -- ------------------------
22 11,740,757.98 7% 821,853.06 12,562,611.04
------ -------------- -- ------ - --------------- -- ------------------------
23 11,498,689.84 7% 804,908.29 12,303,598.13
------ -------------- -- ------ - --------------- -- ------------------------
24 11,253,535.34 7% 787,747.47 12,041,282.81
------ -------------- -- ------ - --------------- -- ------------------------
25 11,005,255.12 5% 550,262.76 11,555,517.88
------ -------------- -- ------ - --------------- -- ------------------------
26 10,753,809.32 5% 537,690.47 11,291,499.79
------ -------------- -- ------ - --------------- -- ------------------------
27 10,499,157.59 5% 524,957.88 11,024,115.47
------ -------------- -- ------ - --------------- -- ------------------------
28 10,241,259.05 5% 512,062.95 10,753,322.00
------ -------------- -- ------ - --------------- -- ------------------------
29 9,980,072.30 5% 499,003.62 10,479,075.92
------ -------------- -- ------ - --------------- -- ------------------------
30 9,715,555.42 5% 485,777.77 10,201,333.19
------ -------------- -- ------ - --------------- -- ------------------------
31 9,447,665.95 5% 472,383.30 9,920,049.25
------ -------------- -- ------ - --------------- -- ------------------------
32 9,176,360.89 5% 458,818.04 9,635,178.93
------ -------------- -- ------ - --------------- -- ------------------------
33 8,901,596.69 5% 445,079.83 9,346,676.52
------ -------------- -- ------ - --------------- -- ------------------------
34 8,623,329.25 5% 431,166.46 9,054,495.71
------ -------------- -- ------ - --------------- -- ------------------------
35 8,341,513.90 5% 417,075.70 8,758,589.60
------ -------------- -- ------ - --------------- -- ------------------------
36 8,056,105.40 5% 402,805.27 8,458,910.67
------ -------------- -- ------ - --------------- -- ------------------------
37 7,767,057.94 5% 388,352.90 8,155,410.84
------ -------------- -- ------ - --------------- -- ------------------------
38 7,474,325.13 5% 373,716.26 7,848,041.39
------ -------------- -- ------ - --------------- -- ------------------------
39 7,177,859.98 5% 358,893.00 7,536,752.98
------ -------------- -- ------ - --------------- -- ------------------------
40 6,877,614.89 5% 343,880.74 7,221,495.63
------ -------------- -- ------ - --------------- -- ------------------------
41 6,573,541.68 5% 328,677.08 6,902,218.76
------ -------------- -- ------ - --------------- -- ------------------------
42 6,265,591.54 5% 313,279.58 6,578,871.12
------ -------------- -- ------ - --------------- -- ------------------------
43 5,953,715.03 5% 297,685.75 6,251,400.78
------ -------------- -- ------ - --------------- -- ------------------------
44 5,637,862.10 5% 281,893.11 5,919,755.21
------ -------------- -- ------ - --------------- -- ------------------------
45 5,317,982.04 5% 265,899.10 5,583,881.14
------ -------------- -- ------ - --------------- -- ------------------------
46 4,994,023.51 5% 249,701.18 5,243,724.69
------ -------------- -- ------ - --------------- -- ------------------------
47 4,665,934.51 5% 233,296.73 4,899,231.24
------ -------------- -- ------ - --------------- -- ------------------------
48 4,333,662.38 5% 216,683.12 4,550,345.50
------ -------------- -- ------ - --------------- -- ------------------------
49 3,997,153.78 0% - 3,997,153.78
------ -------------- -- ------ - --------------- -- ------------------------
50 3,656,354.69 0% - 3,656,354.69
------ -------------- -- ------ - --------------- -- ------------------------
51 3,311,210.41 0% - 3,311,210.41
------ -------------- -- ------ - --------------- -- ------------------------
52 2,961,665.54 0% - 2,961,665.54
------ -------------- -- ------ - --------------- -- ------------------------
53 2,607,663.98 0% - 2,607,663.98
------ -------------- -- ------ - --------------- -- ------------------------
54 2,249,148.90 0% - 2,249,148.90
------ -------------- -- ------ - --------------- -- ------------------------
55 1,886,062.75 0% - 1,886,062.75
------ -------------- -- ------ - --------------- -- ------------------------
56 1,518,347.25 0% - 1,518,347.25
------ -------------- -- ------ - --------------- -- ------------------------
Lease Schedule Page 5
------ -------------- -- ------ - --------------- -- ------------------------
57 1,145,943.38 0% - 1,145,943.38
------ -------------- -- ------ - --------------- -- ------------------------
58 2,961,665.54 0% - 2,961,665.54
------ -------------- -- ------ - --------------- -- ------------------------
59 2,607,663.98 0% - 2,607,663.98
------ -------------- -- ------ - --------------- -- ------------------------
60 - 0% - -
------ -------------- -- ------ - --------------- -- ------------------------
Lease Schedule Page 6
